SSY Base Oil Shipping Report


Although not as busy as they were in late December, the main markets emerged from the long holiday season with a moderate amount of business. Yet it will take a little more time for the markets to get organized before any patterns develop.

U.S. Gulf

On routes to the Far East, there has been a kind of a rollover situation from December in which January space has become pretty scarce, yet freight rates are essentially unchanged. This may change over the next week or so as pressure builds from those charterers who really need to load in January, and there are cargoes of methanol, paraxylene, phenol, acrylonitrile, styrene and ethylene dichloride still to be moved. There are no base oils, though. Rates are currently in the $60 per metric ton region, whether for 5,000 tons or 10,000-ton parcels.

Transatlantic rates continue to increase on the eastbound service as space becomes tighter this month. Parcels of styrene, glycols, cyclohexane, biodiesel and phenol have been noted, but no base oils so far. Fog in the Houston area has caused a number of vessel delays and cancellations, and some of the enquiries in the market are cargoes from ships that have run late. In one case, a package of around 11,000 tons of chemicals from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam was snapped up by another owner at a rate in the high $50s/t.

In the Caribbean market, there seems to have been a considerable number of spot market requirements, but owners say that contractual nominations are lower and in some cases owners have been compelled to amalgamate several trade lanes and serve them with the same ship instead of having individual sailings. Base oils are one of the more active commodities, with small lots going into the Dominican Republic, Mexico and Colombia. Vegetable oils in the amount of 3,000 tons fixed from Norfolk to Puerto Cabello, Venezuela, at $210,000.

Base oils have been fairly busy into Brazil, although the largest cargo, a shipment of 10,000 tons, was in fact the result of a delayed contractual ship losing its cargo to another owner. Other smaller parcels have been noted, including 2,500 tons from Houston and Curacao to Santos, Brazil, which was fixed, and another older requirement for 3,500 tons from the U.S. Gulf into Santos or Rio de Janeiro, which first appeared for shipment back in the middle of December. Other grades noted include methanol, caustic and ethanol. Rates have edged up slightly, so that a 5,000-ton parcel from Houston to Santos would now probably achieve $55/t-$57/t.

Base oils have been one of the busiest products on the route into India and the Middle East Gulf. One cargo of 5,000-9,000 tons is known to have fixed into India, but there are still several traders looking at other requirements into both India and the Middle East Gulf. Ethylene dichloride is starting to look more promising from the U.S. Gulf into India, and there is still interest in shipping ethanol into India. Numbers are reckoned to be in the low- to mid $70s/t for 5,000-ton parcels from Houston to Mumbai.


It has not been that busy a start to the year in the North Sea and Baltic, yet there do not seem to be vast numbers of unemployed ships either. Base oils were being fixed out of the Baltic until a few days ago, but with the Russian New Year holiday now in full swing, it is fully understandable that this trade takes a break. The other product that seems to have been busy is biodiesel, which is a little unusual in winter. Rates are generally flat in the region.

Trade into the West Mediterranean has been fairly active with parcels of caustic, ethylene dichloride, biodiesel, urea ammonia nitrate, MTBE and ethanol being booked. Some attempts to ship base oils into North Africa were noted. Cargoes of paraxylene, ethylene dichloride and caustic are known to have been done into Turkey. A contractual shipment of base oils into Egypt is pending from northwestern Europe.

With more public holidays taking place in certain Catholic and Orthodox countries, the flow of material northbound has not been that great, and rates are somewhat soft presently.

Despite the regional holidays taking place, space has become very tight in certain areas of the Mediterranean. The West Mediterranean, in particular, has been busy and prompt space is almost unobtainable. Rates have not jumped greatly, and occasionally owners have succeeded in adding a euro note or two, but there are also instances in which cargoes that have gone at exactly the same rate as the previous shipment back in December. The Black Sea has been reasonably lively, with cargoes of vegetable oil providing useful backhaul opportunities. Base oils are of course quiet out of the Black Sea.

Transatlantic trade may not be as busy as the period leading up to the end of the year, but there are still requirements to be performed. Sulfuric acid has been seen on several occasions. Twenty-thousand tons of MTBE from Rotterdam to Houston was booked, seemingly at 25 percent higher than the previous fixture back in December. A paraxylene haul of 5,000 tons from Rotterdam to Mexico fetched a level in the mid $40s/t. Traders have been looking at parcels of toluene, mixed xylenes and pyrolysis gasoline. Higher numbers have been mentioned in the clean petroleum market, which has allowed owners to present rates of $30/t for urea ammonia nitrate cargoes, effectively doubling the rate from the end of November.

Very little space remains for January loading on the route to the Far East, causing rates to strengthen to $90/t or more for 5,000-ton cargoes to China. Traders seem intent on placing bright stock into China but such levels may make it an uphill task. Styrene is still under consideration, as is paraxylene, mixed xylenes, pyrolysis gasoline, butanols, acetone, 2-ethylhexanol, normal paraffins, acrylonitrile and adiponitrile.

Trade remains active into India and the Middle East Gulf, where vegetable oil demand is sucking up a lot of open space that would otherwise have been available for some of the chemicals and base oils requirements that are also being quoted. Rates look settled for now.


Asias markets remain exceptionally active, with numerous cargoes all seeking shipment prior to the Chinese New Year later this month. Some of the requirements are certainly weather-related, where ships may have been delayed or cancelled, but the emphasis is firmly in finding prompt space. There is not much of that, however, and while some observers believe the onset of the lunar holidays ought to cause rates to drop, this has yet to occur. Moreover, some charterers are already quoting February requirements, suggesting that inventory levels have not yet peaked. Northbound is registering strong demand currently, and here too the majority of January ships are full, bar the occasional pocket of space. Intra-Southeast Asia routes are also busy and owners can afford to be picky as to which cargoes to take. Only southbound routes have been somewhat calm. Base oils are present throughout the region, but mostly in small parcel sizes.

There has not been a great deal of benzene demand on the transpacific east route, although several February cargoes are visible instead. Several parcels of mixed xylenes have been posted, looking for prompt space into the U.S. Gulf, and there have also been a few small parcels of acetone quoted in this direction. Urea ammonia nitrate in the amount of 30,000 tons from Lanshan, China, to Stockton, U.S., realized around $30/t. The market into Europe is also pretty quiet, apart from some small-parcels traffic. It does mean that there is not a lot of competition either and rates are basically untested.

There are plenty of cargoes in the India and the Middle East Gulf region, and owners are happy enough to keep their ships trading there. Port delays are, however, becoming even worse and many ships are dropping out of schedule. Base oils have been very active out of Al Ruwais, U.A.E. into India, while a couple of Iranian cargoes made their way into India, too. Base oils have been busy out of the Red Sea as well. Eastbound space is tight – no doubt in part because of all the berthing delays, whereas westbound has been slow.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +44 12 0750 7507. Information about SSY can be found In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.

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